The 9th floor is cloaked in excellence as we revel in 1.3% gains for the day. CCJ leads the charge, plus 3.21%, with loyal BAS and HCLP marching lockstep behind her, up 2.16% and 1.99% respectively. That’s 45% of my portfolio right there.
Everything else is being rather well behaved, and I’m making a good showing of the afternoon for it. Any give back from early January is now gone and I’m up 1% for the year.
This shall be the year of uranium. Cower before the terribleness of it all.
Comments »I usually am a little skeptical about the usefulness of guidance. Executive guidance can be some of the worst – people who are intimately wrapped up in a business tend to have a hard time knowing when to say “yeah, this ship is going down.” In fact, business school strictly forbids it.
But the most recent guidance from BAS, for whatever it’s worth, beat expectations. December was supposed to be a heinous month. Instead, it was merely a horrid month. Take that with a grain of salt.
Well rig service hours were unchanged, at about 61%. My long term thesis involves that number catapulting back to 80%+ eventually, which is why I own the name.
Fluid service truck count is up to 1,003 units. Fluid service truck hours are up 8% this year.
The company saw surprise strength in December (which is really just less flaccid weakness, pretending). Instead of the forecasted 7-8% drop in revenues that were expected, they anticipate they only saw a 6-7% drop.
This is all good and well and hearsay. What caught my eye was that they are also reporting their customers are reporting increases in 2014 spending. Now that’s useful to me.
The natural gas/well servicing industry was more or less crushed in 2011 thanks to generally bad dealings by one Aubrey McClendon. That and a half dozen other idiotic moves saddled CHK investors with 60% equity losses, taking the company to par with the lows set in 2009 (which is saying something).
This left most small well servicing firms in quite a predicament. You see, as a group they were pretty much a “no cash on hand” industry. There were only a few, like BAS, that had adequate financing to weather the storm.
A sea of mergers and acquisitions later (not to mention a few major bankruptcies; looking your way PSN.TO) and we may be ready to get back to fair weather. The natural gas spot price has largely recovered. And now BAS is reporting that client spending is looking up.
Comments »My NRP coal partnership got blasted to the tune of 17% after announcing the coal market continued to weaken in 2013, against their expectation. In response to the weak sales of power production and metallurgical coal, NRP’s board announced a 36% reduction in distributions.
This hurts, as I guessed that $20 would average the low mark in the name. Clearly, I was wrong.
I am not selling NRP, though (not yet, at least). My primary reason for buying into NRP was more predicated on coal being a very inexpensive sector to get exposure to and the medium term unlikelihood that the US or global economies will be able to pivot away from coal quickly.
I’ll ride this out for a little bit and see where it goes. There’s been long speculation that NRP may have to cut its distribution, because their debt level is high and their board has ambitious goals to diversify their royalty stream into a variety of commodities, such as raw materials for glass or gas and oil.
The board has reaffirmed they don’t think the partnership is at risk of violating bond covenants, and I think the five year forecast distribution is more likely to contain upside surprises.
NRP is sinking me ~1.5%, which is actually being generously offset by gains elsewhere. NRP was a smaller position than, say, CCJ or BAS. For the day, I am down just ~.5% so far. But we’ll see if NRP doesn’t bleed out hard into the close
Comments »It’s nothing too severe – less than 1% – but I’m getting wacked to start off 2014 nonetheless.
The selloff in my account is led by HCLP, as mediocre fund managers caught padding their positions, trying to save their unspectacular careers, let go the Potemkin equity stakes.
Silver caught a nice bounce into the first of the year, but we have been here before, have we not? I’m mentally prepared for silver to go to $0.00…being shelled out for free at every street corner. Why not? It has no utility, after all…excluding all its utility.
My positions are AEC, MAA, NRP, HCLP, BAS, CCJ, RMCF, UEC (small), BALT, physical silver, and some TSLA puts (a third of which are about to expire worthless on the 18th of this month).
Comments »BAS has imploded 15% in a week. I always pare back that position opportunistically when I can, precisely because I cannot trust it. Sadly, I added on to quick, down 10%, and now have some losses to show for it. The stock is owned by cowards of the lowest caliber.
HCLP is also disappointing me, down off a resurgence from the backs of the frack sand article that made rounds last week.
I was getting excited about TSLA’s selloff, but that has shored up, and is pushing higher. My expectation is the first round of put options expire worthless. I have high hopes for the longer expiration dates.
CCJ though is looking promising. Silver is also pressing higher – I would love a precious metals price recovery for Christmas.
My portfolio is flat on the day. December is young, but time is short, and it appears that I will merely perform with the market this year. A grand opportunity to broadly defeat the indices, rallied from my huge RGR trade in the beginning of the year, was wasted, sadly.
But, maybe Santa Clause will deliver a holiday special for Cain. He has plenty of times before.
Comments »I made a small spread today, with AEC, BAS, and MAA up and everything else down.
MAA hiked their dividend yesterday but a couple tenths of a percent.
We are well into the banal month, so I don’t know why I’m bothering to write. I suppose I want to give the shadows something to read. The 9th floor is deserted, but my work somehow remains busy.
The healthcare situation is a fiasco. Little shits on the internet, working for pasty ThinkProgress-type blogs, are heralding the triumphant relaunch of the HealthCare.gov website. Meanwhile, we’re still basically 7 million people shy of where we thought the enrollment process would be right now. And there are <28 (27 now??) days now on the clock.
I want to make this very clear to you right now – this is not some technical difficulty. This is a big fucking deal.
Suppose you got kicked off your plan. You go to the website and can't enroll. At this point, you don't have health insurance any more.
"But Cain, they can just enroll with the insurance companies directly now."
Except they can't, no, not really. The HealthCare.gov website is the primary mechanism for pushing the subsidies that are supposed to help make this law affordable. Those subsidies come in two flavors: benefits enhancements and cost reductions. And without the fancy linking that's supposed to occur through the website, you are left looking at the non-subsidized cost of coverage.
That means signing up through any place other than the website will be very expensive relative to what you were paying before. How many people do you know that will be able to readily absorb a several hundred dollar a month hit to their budgets? I'm guessing not many. The other option is to slash your coverage away to nil. Which isn't much of a choice if you're sick.
Of course, lots of schmucks are trying to say the subsidy issue isn't an issue, by pushing subsidy calculators from secondary sources and suggesting the uninsured just roll with it. Just how bad are these secondary sources? I know of one instance already with a six figure income showing subsidy eligibility.
So I'm gonna say pretty damn bad…
And that's not even talking about the garbled nonsense being reported getting delivered to carriers. Let me just lay out a few very real situations that are likely to crop up over the next six to twelve months.
There will be people who cannot sign up in time.
There will be people who think they've signed up only to discover (God willing not in a life threatening situation, but yes, probably) that they were never processed.
There will be people who sign up for coverage that has become unaffordable to them, only to be forced insolvent.
There will be people who took benefits reductions to keep their premium in line, to avoid insolvency, only to become sick, be unable to meet the higher cost sharing, and become insolvent anyway.
There will be people who think they know what they're paying, only to have subsidy restatements issued that render them with unaffordable, unchangeable insurance coverage.
There will be people with terminal illness who learn after the fact that their network no longer includes their providers.
There will be insurance companies that experience major system failures, dropping God knows what, where. (Rumors are a quarter of Blue Cross of Michigan's system already crashed in October)
You are in for a year of horror stories slowly seeping to the surface, like a tar pond.
And of course, there will be winners. There will be people who make out like bandits because of this law. There will be people who are so much better off, while it slowly dawns on the 80%+ of Americans that were just fine with their healthcare that the reason their neighbors are being raked across the coals is to provide those winners with better coverage than any of them could buy in the same circumstance.
Comments »
